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VT Gas fined $100K for pipeline cost

Bob Davis (left) and Diane Derrick of Hinesburg hold up signs as Eileen Simollardes of Vermont Gas Systems (not pictured) testifies before the Public Service Board in Montpelier on Wednesday, March 25, 2015. The PSB is considering whether to sanction Vermont Gas for a delay in notifying the board of an increase in the estimated construction costs of a proposed gas pipeline through Addison County. Davis and Derrick are landowners who are opposed to the pipeline crossing wetlands on their property.(Photo: GLENN RUSSELL/FREE PRESS FILE)Buy Photo

Regulators have slapped a $100,000 penalty on Vermont Gas Systems for the late announcement of a rising price tag on the company’s natural gas pipeline.

The Public Service Board released its decision Friday, eviscerating the company for breaking a state rule that requires timely reporting when project costs rise more than 20 percent.

Vermont Gas promised to comply with the fine and repeated a commitment to communicate with the public.

Company officials knew as early as January 2014 that the cost of the pipeline from Colchester to Addison County would rise significantly, according to testimony in the case — but the company delayed the announcement until July.

“By waiting nearly six months ... VGS failed in its obligation of transparency, thereby undermining the effectiveness of the regulatory process and creating mistrust in that process among members of the public,” the three-member Public Service Board wrote in the decision.

The Public Service Board rejected a claim that the company needed months to vet cost estimates, and obtain final permits, before announcing the cost increase.

The $100,000 penalty far exceeds the $35,000 fine suggested by the Vermont Department of Public Service last summer when it asked regulators to scrutinize the delay.

Don Rendall, who joined Vermont Gas as president and CEO in January, said the company is committed to “candor and openness.”

“We understand and respect the Board’s order with regard to events that occurred during the first half of last year,” Rendall said in a statement. “We will comply with the order. We appreciate the Board’s acknowledgment of our overall compliance record.

“Very importantly, we are looking forward to bringing the choice and opportunity of cleaner more affordable natural gas to thousands of Vermonters in Addison County and beyond,” Rendall added.

The $100,000 bill “will not impact ratepayers at all,” Rendall said in an interview.

At a hearing in March, Vermont Gas Vice President Eileen Simollardes expressed regret for the reporting delay.

“The financial penalty is not the biggest deterrent here,” Simollardes told regulators. “It’s the lack of credibility — and it’s the black eye that the company got, or that I got personally.”

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Eileen Simollardes of Vermont Gas Systems testifies before the Public Service Board in Montpelier on Wednesday, March 25. The PSB is considering whether to sanction Vermont Gas for a delay in notifying the board of an increase in the estimated construction costs of a proposed gas pipeline through Addison County.(Photo: GLENN RUSSELL/FREE PRESS FILE)

Sandra Levine, a Conservation Law Foundation attorney involved in the case as a “friend of the court,” said Friday her organization was pleased with the decision.

“It’s a significant penalty that recognizes the seriousness of Vermont Gas’ violation and its failure to responsibly manage this project,” Levine said.